What involvement must an investor have in a regional center project?

On the USCIS website, under the requirements for the I-526 petition, it says that the investor must provide evidence that you will be actively involved in the management of the new commercial enterprise (day-to-day or through policy). I have no problem being involved in my investment, but it seems that the regional centers I have talked with usually assure that no involvement is required. So, what is the level involvement that I must have in a regional center project? Would the level of involvement be different for a direct project?

Answers

The regional center investment is a passive one. This means that you do not actually have to be involved in the day to day operations of the business. This exception is what makes the regional center investment so appealing.

The policy memorandum and the regulations require active participation in the management of the new commercial enterprise, which can be in the form of managing day-to-day operations or in policy formulation (through rights to vote on such matters, for example). As this is even asked on the form I-526, you will need to show proof of your involvement (signing a valid partnership or membership agreement can help).

Only limited involvement is required in a regional center-based project investment to qualify for I-526 filing, such as policy formulation, voting on significant partnership matters (such as dissolution, changing nature of business). Partnership offering documents, including the limited partnership or LLC agreement, must spell this out.

The EB-5 policy memorandum of 2013 details the management requirements for the investor whether it is in a direct or EB-5 regional center project. For example, the investor may be involved in the day to day operations or be on the board of directors and be involved in policy decisions. In addition, the investor in a limited partnership will be deemed to satisfy the management requirements. Every case may be different, but always needs to be compliant.

In general EB-5 investors in a regional center based project will be a limited partner in a limited partnership or a member of an LLC where they have policy level control satisfying the EB-5 regulatory requirements. It is advisable to have your counsel carefully review the LP and LLC documents to ensure the management rights provided are adequate and satisfy the regulations.

In order to qualify for the EB-5 immigrant investor visa, one of the requirements is for the Investor to be either engaged in the business on a day to day basis or through policy formation. So, the investor does not need to be involved in the daily management of the commercial enterprise, as long as he or she is involved in the policy making activities.

Your involvement in the regional center project is that of a limited partner, which has been established as a policy role of active investment. As a limited partner, you will be receiving at least an annual report of what is happening with the project in which you invested as well as the financial report on your investment. Thus, it is not technically true that you will have no involvement in the regional center project.

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